FairSide — Theft Insurance The Crypto Way
Just because someone is not trying to steal your crypto *right now* doesn’t mean they’re not planning to do so. Yes, it may seem a little paranoid but with crypto exploits and attacks on the rise, you can’t trust anyone these days.
FairSide makes it so you don’t have to. Sitting at the intersection of insurance and blockchain, the “cover” protocol is a first for Ethereum’s growing ecosystem. Put simply, it provides protections for HODLed funds in personal wallets, on exchanges, or staked into DeFi protocols. And the way it achieves this is delightfully traditional.
Who Knew Subscriptions Could Work This Well in Blockchain
With crypto ownership reaching new heights, FairSide goes about ensuring the safety of users the old-fashioned way — coverage against hacks, exploits, and theft. The format is that of a standard insurance product — via annual premiums, also known as membership-based. So nothing out-of-the-ordinary there. The only thing that stands out is why no one thought of bringing insurance coverage into the crypto space sooner.
Fairside is set to introduce three levels of protection, beginning with personal wallet theft protection covering cyber crime event for web3 wallets. This will be followed by the implementation of safeguards against DeFi and third-party exchange risks.
The cost for each class of coverage is different but there is a 1 ETH minimum and 100 ETH maximum amount of coverage available to each cover type. The duration period is one calendar year, after which users can choose to renew if they wish to.
So far so good. Here is where things get interesting…
The Fair Side of Insurance Payouts
FairSide operates on a DAO model and there are certain implications for insured users. Despite them covering a broad array of attacks and exploits like key mismanagement, exchange hacks, front-end and governance attacks, smart contract failures, rug pulls and others — pay-outs in the event of a loss are not automatic.
Instead, the class of coverage determine how Loss Events and Claims are handled. Lead Assessors analyse the validity of each loss event and present their findings before the FairSide DAO, which then votes to approve or reject the claim.
The Lead Assessors are third-party security and cyber investigation firms who analyse loss events and identify the cause of loss. They need to provide the proof of loss requirements for users to submit claims but it is the FairSide DAO that votes on loss events. Becoming a member of the DAO happens by passing a Conviction Score threshold via staking on the network and holding FairSide’s native token (FSD).
Making Insurance Work for Crypto
FairSide’s team comes from insurance, blockchain, and fintech — a combo that supercharged the creation of the next generation of Cover Protocols.
- Brandon Brown — Co-founder and CEO
- Andrew Hogue — Co-founder and CPO
- Charles Smith — Co-founder and COO
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